Middle East

India has traditionally pursued a pro-Arab policy regarding the
Arab-Israeli conflict in order to counteract Pakistani influence in the
region and to secure access to Middle East petroleum resources. In the
1950s and early 1960s, this pro-Arab stance did not help India in
establishing good relations with all Arab countries but may have served
to keep peace with its own Muslim minority. India concentrated on
developing a close relationship with Egypt on the strength of Nehru's
ties with Egyptian president Gamel Abdul Nasser. But the New Delhi-Cairo
friendship was insufficient to counteract Arab sympathy for Pakistan in
its dispute with India. Furthermore, Indian-Egyptian ties came at the
expense of cultivating relations with such countries as Saudi Arabia and
Jordan and thus limited India's influence in the region.

In the late 1960s and in the 1970s, India successfully improved
bilateral relations by developing mutually beneficial economic exchanges
with a number of Islamic countries, particularly Iran, Iraq, Saudi
Arabia, and the other Persian Gulf states. The strength of India's
economic ties enabled it to build strong relationships with Iran and
Iraq, which helped India weather the displeasure of Islamic countries
stemming from India's war with Pakistan in 1971. Indian-Middle Eastern
relations were further strengthened by New Delhi's anti-Israeli stance
in the Arab-Israeli wars of 1967 and 1973 and by Indian support for the
fourfold oil price rise in 1973 by the Organization of the Petroleum
Exporting Countries (OPEC). Closer ties with Middle Eastern countries
were dictated by India's dependency on petroleum imports. Oil
represented 8 percent of India's total imports in 1971; 42 percent in
1981; and 28 percent in 1991. India purchased oil from Iran, Iraq, Saudi
Arabia, the United Arab Emirates, and Kuwait and, in return, provided
engineering services, manufactured goods, and labor. The 1980-88
Iran-Iraq War forced India to shift its oil purchases from Iran and Iraq
to Saudi Arabia and the Persian Gulf states. Saudi Arabia and the Gulf
states also have received large numbers of Indian workers and
manufactures and have become the regional base for Indian business
operations.

Two events in 1978 and 1979--the installation of the Islamic regime
under Ayatollah Sayyid Ruhollah Musavi Khomeini in Iran and the Soviet
invasion of Afghanistan in support of the pro-Soviet Marxist regime in
Kabul--complicated India's relations with Middle East countries. From
the Indian perspective, these two events and the Iran-Iraq War changed
the balance of power in West Asia by weakening Iran as a regional power
and a potential supporter of Pakistan, a situation favorable to India.
At the same time, proxy superpower competition in Afghanistan
strengthened the hand of India's adversary Pakistan by virtue of the
military support Pakistan received from the United States, China, and
Arab states led by Saudi Arabia. In the 1980s, India performed a
delicate diplomatic balancing act. New Delhi took a position of
neutrality in the Iran-Iraq War, maintained warm ties with Baghdad, and
built workable political and economic relations with Tehran despite
misgivings about the foreign policy goals of the Khomeini regime. India
managed to improve relations with Middle Eastern countries that provided
support to the Afghan mujahideen and Pakistan by redirecting
Indian petroleum purchases to Saudi Arabia and the Persian Gulf
countries. New Delhi, which traditionally had had close relations with
Kabul, condemned the Soviet invasion only in the most perfunctory manner
and provided diplomatic, economic, and logistic support for the Marxist
regime.

In the early 1990s, India stepped back from its staunch anti-Israeli
stance and support for the Palestinian cause. Besides practical economic
and security considerations in the post-Cold War world, domestic
politics--especially those influenced by Hindu nationalists--played a
role in this reversal. In December 1991, India voted with the UN
majority to repeal the UN resolution equating Zionism with racism. In
1992, following the example of the Soviet Union and China, India
established diplomatic relations with Israel.

During the 1990-91 Persian Gulf War, Indian policy makers were torn
between adopting a traditional nonaligned policy sympathetic to Iraq or
favoring the coalition of moderate Arab and Western countries that could
benefit Indian security and economic interests. India initially adopted
an ambivalent approach, condemning both the Iraqi invasion of Kuwait and
the intrusion of external forces into the region. When the National
Front government led by V.P. Singh was replaced by the Chandra Shekhar
minority government in November 1990, the Indian response changed. Wary
of incurring the displeasure of the United States and other Western
nations on whom India depended to obtain assistance from the
International Monetary Fund (IMF--see Glossary), New Delhi voted for the
UN resolution authorizing the use of force to expel Iraqi troops from
Kuwait and rejected Iraq's linkage of the Kuwaiti and Palestinian
problems. In January 1991, India also permitted United States military
aircraft to refuel in Bombay. The refueling decision stirred such
domestic controversy that the Chandra Shekhar government withdrew the
refueling privileges in February 1991 to deflect the criticism of Rajiv
Gandhi's Congress (I), which argued that India's nominal pro-United
States tilt betrayed the country's nonaligned principles.

Prime Minister Narasimha Rao's September 1993 visit to Iran was
hailed as "successful and useful" by the Indian media and seen
as a vehicle for speeding up the improvement of bilateral relations. Key
developments included discussions on the construction of a pipeline to
supply Iranian natural gas to India and allowing India to develop
transit facilities in Iran for Indian products destined for the
landlocked Central Asian republics. India also sought to assuage its
concerns over a possible Iranian-Central Asian republics nuclear nexus,
which some saw as a potential and very serious threat to India should
Pakistan also join in an Islamic nuclear front aimed at India and
Israel. When Iranian president Hashemi Rafsanjani visited India in April
1995 to sign a major trade accord (the accord also was signed by the
minister of foreign affairs of Turkmenistan) and five bilateral
agreements, India-Iranian relations could be seen to be on the upswing.